Shares in Dairy Crest, the UK’s largest dairy processor, fell today (4 February) amid fears over what impact cost inflation could have on the business, a City analyst told just-food.

Dairy Crest, which owns brands including Country Life butter and Frijj milkshakes, said pre-tax profits for the nine months to the end of December were “in line with expectations”.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

The group said its overall sales, excluding the impact of the sale of its majority stake in Wexford Creamery last summer, were also in line with expectations. Third-quarter sales of its five key brands, which also include Cathedral City, St Hubert Omega 3 and Clover, were up 11%.

Turning to costs, the company said, like much of the food industry, it was “experiencing upward pressure on input costs” including oil, milk and vegetable oil.

Dairy Crest said it was “making progress to recover these from our customers” but said it was “determined to control costs wherever possible and have commence a programme fo internet tenders to assist in the process”.

The group said it was also “optimising” supply chain costs across its dairy network and was investing in its dairies to “drive efficiencies”.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Dairy Crest said its annual pre-tax profits, again projected to be in line with expectations, would be supported by the “anticipated delivery of over GBP20m (US$32.2m) of operational cost savings”.

Chief executive Mark Allen said: “We are encouraged by the progress we have made so far this year and anticipate that we will maintain our momentum through the fourth quarter.”

Shares in Dairy Crest were down 1.1% at 376.6p at 12:06 GMT, having fallen by as much as 2.8% earlier in the day.

Investec analyst Nicola Mallard said: “[The shares] have rallied a bit but I think there is just general nervousness around cost inflation in the sector.”